- Associated Press - Tuesday, May 21, 2013

LOS ANGELES (AP) — Americans got better about paying their credit-card debt on time in the first three months of the year, a period during which many borrowers use income tax returns to tackle their holiday season debt.

The rate of credit-card payments at least 90 days overdue fell to 0.69 percent in the first quarter from 0.85 percent a year earlier — drop of nearly 19 percent, credit reporting agency TransUnion said Tuesday.

The January-March card delinquency rate was also down from 0.73 in the October-December quarter, when many consumers ramped up credit use to finance holiday season purchases.

Neither a 2 percent hike in Social Security payroll taxes that took effect in January nor delayed federal income tax returns this year appeared to blunt borrowers’ ability to manage their debt.

While down, the late-payment rate is above historically low levels. The lowest late-payment rate on TransUnion records going back to the mid-1990s was 0.56 percent, set in the third quarter of 1994. More recently, it was at 0.60 percent in the second quarter of 2011.

All told, the card-delinquency rate has averaged 1.03 percent since 1992, said the firm, whose credit trend data is based on a sample of 27 million consumer records.

“Even a moderate uptick in delinquency is not a cause for concern, because we are at historic lows,” said Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit.

During the last recession, many Americans reined in spending in favor of paying off debt, particularly credit-card balances. The housing downturn also prompted many homeowners to make paying their credit-card accounts on time a priority ahead of other financial obligations, such as their mortgage payments.

Nearly four years after the recession, the U.S. economy and job market are far from fully recovered, but they have made steady progress.

The national unemployment rate remains at an elevated 7.5 percent, but that’s down from a high of 10 percent in October 2009. The economy has been adding jobs steadily, home values are rising nationally, and the stock market has been on a sustained upswing, with the Dow Jones industrial average index up about 17 percent this year.

Those factors have helped boost confidence among consumers, making them feel wealthier and more willing to spend.

Even so, many remain careful about how they manage their debt.

Average credit-card debt per borrower fell 1.7 percent to $4,878 in the first quarter from $4,962 in the similar period last year, TransUnion said.

On a quarterly basis, it declined 4.8 percent from $5,122 in the fourth quarter.

TransUnion, however, has forecast that average credit-card debt will rise by roughly 8 percent to $5,446 by the end of this year — the highest level in four years.

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